Report – Toyota is mulling a factory location in Mexico

Toyota is scouting Mexico for possible factory sites looking to build an assembly line in the country as it remained the last major automaker without an assembly facility there, two people with direct knowledge of the subject stated.

Toyota executives met this week with Mexican federal officials for preliminary talks about building a plant in the country while its search crosses several states in Mexico.

Low labor costs and favorable trade accords are attracting foreign auto makers to Mexico. While Toyota stands as an exception among other carmakers in the country, without having a high-volume local plant, three $1 billion factories have been announced since June this year for Kia Motors Corp., Bayerische Motoren Werke AG and a Daimler AG-Nissan Motor Co. venture.

Michael Robinet, managing director at HIS Automotive in Sounthfield, Michigan said that “Virtually every major manufacturer that’s active in the North American market is looking at capacity expansion, and Mexico is definitely a strong candidate to get that capacity. Mexico is now the crossroads of the automotive trade in the Western hemisphere.”

A spokeswoman for Toyota stated that the carmaker is evaluating opportunities in North America, but that no decisions have yet been made. A Toyota plant would add to the investments in Mexico that the government says include $10 billion for factories announced since December 2012.